REG - Red Rock Resources - Half-year Report
03/04/2023 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20230403:nRSC0388Va&default-theme=true
RNS Number : 0388V Red Rock Resources plc 03 April 2023
31 March 2023
Red Rock Resources plc
Unaudited half-yearly results for the six months ended
31 December 2022
Red Rock Resources plc ("Red Rock" or "the Company"), the natural resources
exploration and development company with interests in gold, copper, cobalt,
lithium and other minerals, announces its half-yearly results for the six
months ended 31 December 2022.
Chairman's Statement
We have pleasure in presenting our financial results for the six months to
31(st) December 2022. The figures are not materially changed from the previous
year, other than an increase in current liabilities as the Company has sought
to avoid dilution while waiting for what were expected to be material positive
developments in the DRC and in the listing of Elephant Oil. Both these
developments have been slower than expected to eventualise.
DRC Legal Action
Much time over the last months has been spent on dealing with one important
matter. In December 2019 our 50.1% owned joint venture assets in the
Democratic Republic of Congo were signed away behind our backs for $20 million
to an initial buyer and then immediately sold on for several hundred million
dollars to a further party, although these transactions were carefully hidden
from us at the time. In our efforts to restore every dollar of this lost value
to the Company, we first took advice from UK counsel as to our course of
action, and then litigated in the DRC in relation to the $20m. We obtained a
final and executory judgment early in 2022 for 50.1% of $5m, which was the
part of the $20m that had already been paid to VUP by the initial buyer, and
then went to arbitration on the $15m balance which had not yet been paid out
by the initial buyer. We were awarded a further $2m costs and damages in
relation to the initial action on the $5m. We had not been able up to now to
enforce the first $2.5m judgment against third parties that might hold VUP
funds, since it was argued that the continuing appeal on costs and damages
meant that the matter was not yet resolved. We believe that we are now able to
do so, in relation to both the $2.5m and the $2m awards.
The arbitration in relation to the $15m, of which we again claim 50.1%,
finished its hearings in July 2022 and awaits formal signature of the Minutes
and Acte Transactionnel, which we expect at any time.
We will vigorously pursue payment of sums due in the DRC, but as a result of
the undertakings given by the buyer, a parastatal company, in the course of
the arbitration process, our expectation is that payments will be made
promptly. This would be so significant an event for our cash flow outlook that
anticipation of it has influenced our actions to date, and so were there
likely to be any delay, we would need to accelerate alternative measures,
whether by fund-raising or sale of non-core assets, to strengthen our balance
sheet.
Given that we have established our rights as 50.1% owners of the JV property
under Congolese law, we are turning our attention to those remedies available
to us in other jurisdictions or from other parties, and in connection with
this will be seeking further advice from counsel.
The long and gruelling process in the DRC that appears now to be ending has
required patience, perseverance, and discretion on our part, and at times
great courage on the part of our coadjutors in the DRC. The Administration has
evidenced, though discreetly, its concern that foreign investors' rights
should be respected and has made clear that it wishes to provide a better
environment for foreign investment, particularly from the UK, than has
sometimes in the past been the case.
We look forward to building on the strong relationships we have built in the
DRC and to seeing many other investors follow our lead in a country that is
rapidly developing. We have dealt with highly competent officials and
professionals willing to work diligently and honestly to see their country
progress, and those we have dealt with are not the only ones.
Other Assets
Besides copper and cobalt in the Congo, we have pursued new lithium
opportunities in Zimbabwe, Africa's largest lithium producer. Our first
project at Tin Hill has seen the final stage of the permitting process begin
with the submission of a full Environment Impact Assessment, and we expect to
be in production within weeks. Further projects are following the same
process, and our object is to have production from more than one location and
so to increase both production volume and the longevity of our operations.
Elsewhere, our portfolio consists of a spread of gold activities, ranging from
our joint venture company New Ballarat Gold Corporation Plc, with gold
exploration assets in Victoria, to our 723,000 ounce Resource in Kenya, that
is capable of being enlarged by drilling, to our royalty in Colombia at El
Limon where we expect payments to resume following the conclusion of an
investment programme by the operator, to drilling in Burkina Faso with strong
intercepts including 20m at 3.19 g/t gold from 22m depth, to some high quality
and prospective applications in Côte d'Ivoire now very near grant, and to an
application to joint venture with the Government a large formerly mined gold
project in Algeria.
A six hole, 988 metre, diamond drill programme has been carried out in
Victoria over the Australian Summer months by New Ballarat Gold Corporation ,
and encountered visible gold in four of the six holes. Final sample results
are awaited but it is already obvious that the programme was a technical
success, intersecting structures where anticipated, confirming the presence of
gold mineralisation in the target zones, and identifying one new area of
mineralisation.
In the months ahead, we expect to make progress towards listing of New
Ballarat, and will be entering the process of licence renewal in Kenya.
Our longstanding investment in Elephant Oil Corporation, which has filed a
form S-1/A with the SEC with the intention of listing on the U.S. markets,
takes us into what has become one of the most interesting oil exploration
provinces, in Namibia, as well as onshore Benin on the Nigerian border. The
listing has been delayed beyond our expectation, but we are still anticipating
this proceeding this year and after the six-month lock-in we will have the
opportunity of realizing our investment.
Although the market environment may not be strong currently, gold has
investment attractions as an alternative and safe currency, battery metal
demand continues strong, and our projects are we believe good ones so we do
not see why we should be held back from achieving a higher valuation, more
reflective of the Company's exceptional potential. From DRC we expect a return
of capital, and from Zimbabwe we expect some positive cash flows from sales of
lithium, which will be a significant alteration to our prospects. Longer term
we look for liquidity events in Australia and at Elephant Oil, as well as
potentially in Kenya, to improve the balance sheet further, but in the short
term the Company's financial projections are highly dependent on assumptions
of progress in the DRC.
Working Capital Requirements
As noted above, whilst the Company remains confident that it will receive
funds pursuant to the judgments and arbitration in the DRC, it is appropriate
to consider how the immediate cashflow needs of the Company can be met in the
short-term were these funds not to be forthcoming. The Company has received
indications of equity and loan-note funding which it is confident will meet
these short-term needs. If the anticipated funds from the DRC remain
outstanding beyond that period, then there will clearly be a longer-term
funding gap and the Company will seek to realize assets, a process which has
already started with a number of parties who have made approaches to the
Company in this regard. The Company has always worked on the basis that every
asset is for sale at a price, and no serious approach is rejected out of hand.
Andrew Bell
Chairman
31 March 2023
Consolidated statement of financial position
as at 31 December 2022
Notes 31 December 31 December 30 June 2022
2022 2021
Unaudited, Unaudited, Audited,
£'000 £'000 £'000
ASSETS
Non-current assets
Investments in associates and joint ventures 1,030 1,699 1,030
Financial instruments 8 736 748 736
Exploration assets 9 13,287 13,653 13,265
Mineral tenements 525 180 511
Property, Plant & Equipment 2 - -
Non-current receivables 2,320 1,344 2,320
Total non-current assets 17,900 17,624 17,862
Current assets
Cash and cash equivalents 242 182 66
Financial assets - investment in derivatives - - -
Loans and other receivables 770 508 824
Total current assets 1.012 690 890
TOTAL ASSETS 18,912 18,314 18,752
EQUITY AND LIABILITIES
Equity attributable to owners of the parent
Called up share capital 10 2,847 2,835 2,839
Share premium account 31,270 30,924 31,077
Other reserves 1,565 652 1,434
Retained earnings (20,984) (18,314) (19,812)
Total equity attributable to owners of the parent 14,698 16,097 15,538
Non-controlling interest (537) (319) (420)
Total equity 14,161 15,778 15,118
LIABILITIES
Non-current liabilities
Trade and other payables 540 316 415
Borrowings 822 - 822
Total non-current liabilities 1,362 316 1,237
Current liabilities
Trade and other payables 1,461 1,231 1,355
Short term borrowings 11 1,928 989 1,042
Total current liabilities 3,389 2,220 2,397
TOTAL EQUITY AND LIABILITIES 18,912 18,314 18,752
The accompanying notes form an integral part of these financial statements.
Consolidated statement of income
for the period ended 31 December 2022
Notes 6 months to 31 December 6 months to 31
2022 December 2021
Unaudited, Unaudited,
£'000 £'000
Administrative expenses 4 (633) (620)
Project development costs 5 (261) (411)
Exploration expenses (204) (271)
Other income - 44
Share of losses of associates and joint ventures - -
Foreign exchange gain/(loss) 55 (4)
Finance income/(expenses), net 6 (267) (206)
(Loss)/profit for the period (1,310) (1,468)
Tax credit - -
(Loss)/profit for the period 7 (1,310) (1,468)
(Loss)/profit for the period attributable to:
Equity holders of the parent (1,172) (1,348)
Non-controlling interest (138) (120)
(1,310) (1,468)
(Loss)/profit per share
(Loss)/profit per share - basic, pence 3 (0.10) (0.111)
(Loss)/profit per share - diluted, pence 3 (0.10) (0.111)
The accompanying notes form an integral part of these financial statements.
Consolidated statement of comprehensive income
for the period ended 31 December 2022
6 months to 31 6 months to 31
December 2022 December 2021
Unaudited, £'000 Unaudited, £'000
(Loss) /profit for the period (1,310) (1,468)
Transfer to revaluation reserve in relation to revaluation of FVTOCI - 183
investments
Gain on transfer of FVTOCI financial assets on disposal - 1,005
Unrealised foreign currency loss arising upon retranslation of foreign 38 (85)
operations
Total comprehensive income/(loss) for the period (1,272) (365)
Total comprehensive income/(loss) for the period attributable to:
Equity holders of the parent (1,133) (245)
Non-controlling interest (138) (120)
(1,271) (365)
The accompanying notes form an integral part of these financial statements.
Consolidated statement of changes in equity
for the period ended 31 December 2022
The movements in equity during the period were as follows:
Total attributable to owners of
Share premium the Parent Non- controlling
Share capital account Retained earnings Other reserves interest Total equity
Unaudited £'000 £'000 £'000 £'000 £'000 £'000 £'000
As at 30 June 2022 (audited) 2,839 31,077 (19,812) 1,434 15,538 (420) 15,118
Changes in equity for the six- month period ending 31
December 2021
Loss for the period - - (1,172)) - (1,172) (138) (1,310)
Unrealised foreign currency gains on translation of foreign operations - - - 38 38 21 59
Total comprehensive - - (1,172) 38 (1,134) (117) (1,251)
income/(loss) for the period
Transactions with shareholders
Issue of shares 8 193 - - 201 - 201
Grant of warrants - - - 93 93 - 93
Total transactions with 8 193 - 93 294 - 294
shareholders
As at 31 December 2022 2,847 31,270 (20,984) 1,565 14,698 (537) 14,161
(unaudited)
As at 30 June 2021 (audited) 2,835 30,924 (18,741) 1,627 16,645 (199) 16,446
Changes in equity for the six- month period ending 31
December 2020
Loss for the period - - (1,348) - (1,348) (120) (1,468)
Transfer of FVTOCI relating to disposals - - - (1,073) (1,073) - (1,073)
Transfer of FVTOCI relating to revaluations - - - 183 183 - 183
Gains on disposal of FVTOCI taken - - 1,775 - 1,775 - 1,775
directly to reserves
Unrealised foreign currency gains on translation of foreign operations - - - (85) (85) - (85)
Total comprehensive 2,835 30,924 (18,314) 652 16,097 (319) 15,778
income/(loss) for the period
As at 31 December 2021 2,835 30,924 (18,314) 652 16,097 (319) 15,778
(unaudited)
FVTOCI Foreign currency translation Share- based payment Warrants reserve Total other reserves
financial reserve reserve
assets
reserve
Unaudited £'000 £'000 £'000 £'000 £'000
As at 30 June 2022 (audited) 402 (19) 230 821 1,434
Changes in equity for six months ended 31 December 2021
Unrealised foreign currency loss on translation of foreign - 38 - - 38
operations
Total other comprehensive income for the period - 38 - - 38
Transactions with shareholders
Grant of warrants - - - 93 93
Total transactions with shareholders - - - 93 93
As at 31 December 2022 (unaudited) 402 19 230 914 1,565
As at 30 June 2021 (audited) 426 158 230 813 1,627
Changes in equity for six months ended 31 December 2021
Transfer of FVTOCI reserve in relation to revaluation of FVTOCI 183 - - - 183
investments
Decrease in FVTOCI reserve in relation to disposals (1,073) - - - (1,073)
Unrealised foreign currency loss on translation of foreign - (85) - - (85)
operations
Total other comprehensive income for the period (890) (85) - - (975)
Transactions with shareholders
Total transactions with shareholders - - - - -
As at 31 December 2021 (unaudited) (464) 73 230 813 652
Consolidated statement of cash flows
for the period ended 31 December 2022
6 months to 31 6 months to 31
December 2022 December 2021
Unaudited, Unaudited,
£'000 £'000
Cash flows from operating activities
(Loss)/profit before tax (1,288) (1,468)
Decrease/(Increase) in receivables 55 51
Increase/(Decrease) in payables 103 354
Share-based payments 94 -
Depreciation - -
Finance income, net 173 205
Currency adjustments - 4
Net cash outflow from operations (863) (854)
Cash flows from investing activities
Purchase of property, plant and equipment (2) -
Proceeds from sale of investments - 1,808
Payments for capitalised exploration costs (22) (138)
Payments to increase interest in tenements (14) (56)
Payments to increase interest in associate - (114)
Net cash (outflow)/inflow from investing activities (38) 1,500
Cash flows from financing activities
Proceeds from issue of shares 201 -
Interest paid (173) (205)
Proceeds from new borrowings 1,011 100
Repayments of borrowings - (811)
Net cash inflow/(outflow) from financing activities 1,039 (916)
Net increase in cash and cash equivalents 138 (270)
Cash and cash equivalents at the beginning of period 66 457
Exchange losses on cash and cash equivalents 38 (5)
Cash and cash equivalents at end of period 242 182
Half-yearly report notes
for the period ended 31 December 2022
1 Company and group
As at 31 December 2022, 30 June 2022 and 31 December 2021 the Company had one
or more operating subsidiaries and has therefore prepared full and interim
consolidated financial statements respectively.
The Company will report again for the year ending 30 June 2023.
The financial information contained in this half yearly report does not
constitute statutory accounts as defined in section 435 of the Companies Act
2006. The financial information for the year ended 30 June 2022 has been
extracted from the statutory accounts for the Group for that year. Statutory
accounts for the year ended 30 June 2022, upon which the auditors gave an
unqualified audit report which did not contain a statement under Section
498(2) or (3) of the Companies Act 2006, have been filed with the Registrar of
Companies.
2 Accounting Polices
Basis of preparation
The consolidated interim financial information has been prepared in accordance
with IAS 34 'Interim Financial Reporting.' The accounting policies applied by
the Group in these condensed consolidated interim financial statements are the
same as those applied by the Group in its consolidated financial statements as
at and for the year ended 30 June 2022, which have been prepared in accordance
with IFRS.
3 Earnings per share
The following reflects the loss and number of shares data used in the basic
and diluted loss per share computations:
6 months to 6 months to
31 December 2022 31 December 2021
Unaudited Unaudited
Profit/(loss) attributable to equity holders of the parent company, Thousand (1,310) (1,348)
pounds Sterling
Weighted average number of Ordinary shares of £0.0001 in issue, used for 1,279,734,195 1,216,708,801
basic EPS
Effect of all dilutive potential ordinary shares from potential ordinary
shares that would have to be issued, if all loan notes convertible at the
discretion of the noteholder converted at the -
beginning of the period -
Weighted average number of Ordinary shares of £0.0001 in issue, including 1,279,734,195 1,216,708,801
potential ordinary shares, used for diluted EPS
Profit/(loss) per share - basic, pence (0.10) (0.111)
Profit/(loss) per share - diluted, pence (0.10) (0.111)
At 31 December 2022 and 31 December 2021, the effect of the following the
instruments is anti-dilutive, therefore they were not included into the
diluted earnings per share calculation.
6 months to 6 months to
31 December 2022 31 December 2021
Unaudited Unaudited
Share options granted to employees - not vested and/or out of the money 50,000,000 62,820,000
Number of warrants given to shareholders as a part of placing
equity instruments - out of the money 426,892,441 380,197,618
Total number of contingently issuable shares that could
potentially dilute basic earnings per share in future 476,892,441 443,017,618
Number of warrants - vested and in the money at year end but -
not included into diluted EPS calculation due to their effect being -
anti-dilutive
Number of share options granted to employees - vested and in the money at year - -
end but not included into diluted EPS calculation due to their effect being
anti-dilutive
Total number of contingently issuable shares that could potentially dilute
basic earnings per share in future and anti- dilutive potential ordinary
shares that were not included into the fully diluted EPS calculation 476,892,441 443,017,618
There were no ordinary share transactions after 31 December 2022, that that
could have changed the EPS calculations significantly if those transactions
had occurred before the end of the reporting period.
4 Administrative expenses
6 months to 6 months to
31 December 2022 31 December 2021
Unaudited Unaudited
£'000 £'000
Staff Costs:
Payroll 329 273
Pension 28 22
Consultants 8 8
HMRC / PAYE 20 21
Professional Services:
Accounting 49 36
Legal 8 15
Marketing 10 25
Other 1 -
Regulatory Compliance 46 58
Travel 11 47
Office and Admin:
General 19 43
IT costs 35 6
Rent 44 46
Insurance 25 20
Total administrative expenses 633 620
Included in the above admin costs for the year are £230,000 (2021: £174,000)
in costs related to the administration of subsidiary project undertakings.
5 Project development expenses
Project development expenses include costs incurred during the assessment and
due diligence phases of a project, when material uncertainties exist regarding
whether the project meets the Company's investment and development criteria
and whether as a result the project will be advanced further.
6 months to 6 months to
31 December 2022 31 December 2021
Unaudited Unaudited
£'000 £'000
Project development expenses
VUP (Congo) 15 35
Zlata Bana (Slovakia) - -
Galaxy (Congo) - 31
Luanshimba (Congo) 47 106
Kinsevere (Congo) - 3
Mid Migori Mines (Kenya) - 10
Zimbabwe Lithium 15 -
Greenland 80 69
Others 104 157
Total project development expenses 261 411
6 Finance income/(expenses), net
6 months to 6 months to
31 December 2022 31 December 2021
Unaudited Unaudited
£'000 £'000
Interest income - -
Share based payments (94) -
Interest expense (173) (206)
Total Finance income/(expenses), net (267) 206
7 Segmental analysis
Other exploration Corporate
Kenyan exploration Australian exploration DRC and unallocated
exploration Total
For the six-month period to 31 December 2022 £'000 £'000 £'000 £'000 £'000 £'000
Revenue
Total segment external revenue - - - - - -
Result
Segment results (258) (146) (64) (201) (374) (1,043)
Loss before tax and finance costs
-
Interest income
Interest expense (267)
Loss before tax (1,310)
Tax -
Loss for the period (1,310)
Jupiter Mines Limited Corporate
Kenyan exploration Australian exploration DRC and unallocated
exploration Total
For the six-month period to 31 December 2021 £'000 £'000 £'000 £'000 £'000 £'000
Revenue
Total segment external revenue - - - - - -
Result
Segment results (271) (163) (174) (241) (413) (1,262)
Loss before tax and finance costs (1,262)
Interest income -
Interest expense (206)
Loss before tax (1,468)
Tax -
Profit for the period (1,468)
A measure of total assets and liabilities for each segment is not readily
available and so this information has not been presented.
8 Financial instruments - Fair value through other comprehensive income
31 December 31 December 30 June
2022 2021 2022
Unaudited Unaudited Audited
£'000 £'000 £'000
At the beginning of the period 736 1,755 1,755
Additions - 223 223
Disposals - (1,413) (1,693)
Change in fair value - 183 451
At the end of the period 736 748 736
9 Exploration assets
31 December 31 December 30 June
2022 2021 2022
Unaudited Unaudited Audited
£'000 £'000 £'000
At the beginning of the period 13,265 13,515 13,515
Additions 22 138 150
Reclassification from non-current financial assets - - (400)
At the end of the period 13,287 13,653 13,265
10 Share Capital of the company
Number Nominal,
£'000
Deferred shares of £0.0009 each 2,371,116,172 2,134
A deferred shares of £0.000096 each 6,033,861,125 579
Ordinary shares of £0.0001 each 1,341,147,238 134
As at 31 December 2022 2,847
11 Short-term borrowings
Reconciliation of Liabilities Arising from Financing Activities
Cash flow Non - cash flow Non - cash flow Non-cash Non-cash
30 June loans received Conversions Interest accrued flow Reclassification flow Forex movement 31 Dec
Group 2022 2022
£'000 £'000 £'000 £'000 £'000 £'000 £'000
Loan from institutional 577 410 (577) 40 - 5 455
investors
Convertible notes 317 47 577 3 - - 944
Other loans 100 384 - 45 - - 529
Total 994 841 - 88 - 5 1,928
12 Capital Management
Management controls the capital of the Group in order to control risks,
provide the shareholders with adequate returns and ensure that the Group can
fund its operations and continue as a going concern.
The Group's debt and capital includes ordinary share capital and financial
liabilities, supported by financial assets. There are no externally imposed
capital requirements.
Management effectively manages the Group's capital by assessing the Group's
financial risks and adjusting its capital structure in response to changes in
these risks and in the market. These responses include the management of debt
levels, distributions to shareholders and share issues.
There have been no changes in the strategy adopted by management to control
the capital of the Group since the prior period.
13 Subsequent Events
On 24 February 2023, the Company announced that it had issued 26,753,616 new
ordinary shares to an investor at a price of £0.0025 per share, under the
funding agreement originally announced on 15 December 2022. The Company
further announced that the Company had agreed with this investor that the
investor may elect that up to $274,000 of the initial subscription amount
could now be subscribed at this same price of £0.0025 per share. In
addition, the Company agreed to pay the investor a variation fee of $78,000
within the next thirty days, or at its election, this amount would be added to
the outstanding subscription amount.
On 15 March 2023, the Company announced that it had issued 56,487,601 new
ordinary shares to an investor at a price of £0.0018 per share, under the
funding agreement originally announced on 15 December 2022 and later amended
on 24 February 2023.
For further information, please contact:
Andrew Bell 0207 747
9990 Chairman Red
Rock Resources Plc
Roland Cornish/ Rosalind Hill Abrahams 0207 628 3396
NOMAD Beaumont Cornish Limited
Jason Robertson 0207 374
2212
Broker First Equity Limited
This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END IR FLFITSFILIIVRecent news on Red Rock Resources
See all newsREG - AIM - AIM Notice - 25/04/2024
AnnouncementREG - Red Rock Resources - Issue of Equity, Directors' Dealings and TVR
AnnouncementREG - Red Rock Resources - Issue of Equity
AnnouncementRCS - Red Rock Resources - DRC and Gold Assets Update
AnnouncementREG - Red Rock Resources - Half-year Report
Announcement